CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS

CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS

The clause 2(2 obligation to provide an 'updated Audit Report' was a condition precedent to payment of the balance and required a report updated to the date of the agreement or as near as reasonably possible; the defendants failed to provide an appropriately updated report and unlawfully withdrew resignation/nomination letters under clause 5, amounting to fundamental breaches and repudiation of the contract by the defendants; plaintiffs were entitled to terminate the contract and recover the deposit and consequential losses; judgment awarded to plaintiffs and counterclaim dismissed.

Citation
CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS
Parties
1st Plaintiff: Cantab International Limited; 2nd Plaintiff: Ng Tsz Man; 3rd Plaintiff: Leung Kin Yan; 1st Defendant: Luk Ngai Ling Irene; 2nd Defendant: Cantab Education Centre (Fo Tan) Limited; 3rd Defendant: Cantab Education Centre (Kowloon Bay) Limited; 4th Defendant: Cantab Education Centre (Prince Edward) Limited; 5th Defendant: Cantab Education Centre Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 November 2016
Case Number
HCA1022/2012
Procedural Posture
Contract Dispute for Sale of Business / Judgment (court of First Instance)
Outcome
Judgment for the plaintiffs; defendants' counterclaim dismissed
Legal Topics
Breach of Contract, Repudiatory Breach and Rescission, Sale of Business as Going Concern, Obligation to Provide Audited Financial Information, Registration/approval of School Managers
Source Language
EN
Contract Law Commercial Law Company Law Education Regulation Breach of Contract Repudiatory Breach and Rescission Sale of Business as Going Concern Obligation to Provide Audited Financial Information +1 more

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Parties

Cantab International Limited

1st Plaintiff

Ng Tsz Man

2nd Plaintiff

Leung Kin Yan

3rd Plaintiff

Luk Ngai Ling Irene

1st Defendant

Cantab Education Centre (Fo Tan) Limited

2nd Defendant

Cantab Education Centre (Kowloon Bay) Limited

3rd Defendant

Cantab Education Centre (Prince Edward) Limited

4th Defendant

Cantab Education Centre Limited

5th Defendant

Procedural Posture

Contract Dispute for Sale of Business / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether clause 2(2) required delivery of an updated audit report before payment of the balance and whether the defendants failed to comply
  2. 2 Whether clause 5 was breached by the defendant withdrawing resignation/nomination letters to the Education Bureau
  3. 3 Whether the cumulative breaches amounted to repudiation entitling plaintiffs to terminate the contract and claim damages

Ratio Decidendi

The clause 2(2 obligation to provide an 'updated Audit Report' was a condition precedent to payment of the balance and required a report updated to the date of the agreement or as near as reasonably possible; the defendants failed to provide an appropriately updated report and unlawfully withdrew resignation/nomination letters under clause 5, amounting to fundamental breaches and repudiation of the contract by the defendants; plaintiffs were entitled to terminate the contract and recover the deposit and consequential losses; judgment awarded to plaintiffs and counterclaim dismissed.

Court Disposition

Judgment for the plaintiffs; defendants' counterclaim dismissed

Orders

  • Judgment for the plaintiffs in the sum of HK$2,186,371.78
  • Return of HK$1,000,000 (first instalment of purchase price)